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Thomas Cook heads for bumper year
Thursday, 28 Nov, 2005
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ABTA Convention special report: Thomas Cook has claimed it will significantly increase profits in 2005 and revealed that its margin on the sale of holidays had reached 5%.
Last year the company reported a profit of GBP 52 million but UK chief executive manny Fontenla-Novoa said it was on target to finish the year well ahead of that figure.
“It’s been an absolutely fantastic year for tour operators and really I should retire now on a high,” said Fontenla-Novoa.
“Margins have hit the magic 5% level, higher than they have ever been. The reason is that MyTravel took nearly 750,000 holidays out of the market and for the first time supply has been matched to demand, so we have got really good prices this year. If you are just a retailer then it has been tough because retailers make money when there is a higher volume of holidays to sell.”
However, Fontenla-Novoa said current bookings for winter were “a bit soft”.
Fontenla-Novoa said the company’s reputation had recovered from the early days of budget brand JMC, which attracted a lot of complaints.
“In customer service we have had another exceptional year. We’ve recovered from JMC, which was appalling and nearly destroyed the brand.”
Since 2002, he said there had been a decline of 25% in the number of people going into its agencies, although he claimed that they were now more productive.
“Since 1999, there has been a drop of around 1,000 agents and this will continue. It will probably settle at around 5,200 to 5,300 branches. As for our situation, we have around 600 shops in prime position. Will we close any? We’ll let the customer decide what they want, but we have around 400 that have expiring leases over the next two years so we are in an excellent position (to be flexible).”
Fontenla-Novoa said around 55% of its bookings went through its own retailers and this would rise to around 75% in the future.
Report by Jeremy Skidmore
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